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A solid tax framework for REITs is imperative

11 October 09 | Aris Karytinos
Aris Karytinos

COMPANIES

ARXIKON S.A.

Developer - GREECE

NAI Hellas

Consultant - GREECE

NBG PANGAEA

REIΤ - GREECE

Solum Property Solutions

Consultant - GREECE

PEOPLE

Aristotelis Karytinos

CEO of NBG Pangaea REIC NBG Pangaea REIC

The new REIT established by the National Bank of Greece (NBG) will hold a €900 mln to €1bn portfolio, comprising properties currently occupied by the Bank (branches and offices), excluding the known as historical buildings, such as the bank's central branch in Kontzia Square, in the centre of Athens. The following year, the newly established company will focus on adding to its portfolio properties not used by the bank, says General Manager Mr. Aris Karitinos.

The new REIT established by the National Bank of Greece (NBG) will hold a €900 mln to €1bn portfolio, comprising properties currently occupied by the Bank (branches and offices), excluding the known as historical buildings, such as the bank's central branch in Kontzia Square, in the centre of Athens. The following year, the newly established company will focus on adding to its portfolio properties not used by the bank, says General Manager Mr. Aris Karitinos.

Speaking to www.ered.gr, Mr. Karytinos stressed that if market conditions allow it, the company will make further investments using its ability to address the banking sector at the time between its official establishment and its IPO.

The volume of these investments cannot be defined up front, since it depends on whether solid income properties will be available at the time. Portfolio diversification is a very important element for institutional investors when it comes to investing with a REIT. The extent to which our portfolio will expand depends on market conditions and if good product becomes available, says Mr. Karytinos.

The necessary permits from the Greek Capital Market Commission are expected to be issued by the end of the year and the law allows one year before entering the stock market. The minimum a company REIT can trade via the stock market is 25% of its holdings. The decisions on the exact time of the listing the exact percentage traded will be made based again on market conditions.

Commenting on the company's possible investments abroad, the new REIT's General Manager said that the company intends to focus on the Greek market, where there are several taxation benefits. Foreign markets will be considered of course, mostly EU countries. Turkey is considered mostly in theory, since, as Mr. Karytinos stressed, it is a market with interest mostly for developers.

Concerning taxation issues, Mr. Karytinos says: "The taxation framework for REITs in Greece has changed twice, a fact which not justified by profit expectations and also makes foreign investors think of us as unreliable, since nobody can reassure them that the framework will not change again. The tax framework applied on REITs in European countries is specific, they are exempted from taxation. In order to be able to compete with European REITs we have to operate under similar tax laws".

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